Amazon prices what they can get away with, not what their costs are. Jeff Bezos’s rocketry hobby is a testament to Amazon’s ability to extract surplus.
I think the point is Amazon cuts costs and reduces price first, prices out the competition through economics of scale, then once competition is eliminated is able to raise prices.
Bezos's wealth is ~100% due to stock appreciation, which in turn is tied much more closely to AWS than to the consumer store.